After years of toe-to-toe battling with a small band of critics and a fellow billionaire, Barry Diller said Wednesday that he was pulling the plug on his family’s commitment to build and operate a $250 million performance center on an undulating pier 186 feet off the Hudson River shoreline.

It was a fizzling end to a grand scheme that aimed to create a bold new landmark along the Manhattan waterfront on par with the nearby High Line, which has become one of the top tourist draws in the city.

Some critics called the plan a monument to a billionaire’s ego, and it was quickly nicknamed “Diller Island.”

Mr. Diller’s decision about the project, called Pier 55, came amid settlement discussions between the Hudson River Park Trust, which was overseeing the project, and the plan’s opponents, a small civic group backed by Douglas Durst of the New York real estate family.

A session scheduled for Wednesday was postponed at the last minute.

The futuristic pier would have stood on a forest of pilings in the river and would have included an amphitheater and two landscaped areas for staging musical and theatrical performances.

Mr. Diller, the chairman of IAC/InterActive Corporation, had enlisted Hollywood friends to create an ambitious program that he and his wife, the fashion designer Diane von Furstenberg, would underwrite.

But the cost ballooned to more than $250 million today from $35 million six years ago because of the complexity of the design and the delays caused by legal wrangling over the pier’s placement in a protected estuary, among other issues.

“Because of the huge escalating costs and the fact it would have been a continuing controversy over the next three years I decided it was no longer viable for us to proceed,” Mr. Diller said in an interview, appearing visibly distressed about dropping a project he had taken to heart.

Mr. Diller’s reversal caught everyone by surprise. Richard Emery, a lawyer for the opponents, said he was “shocked” by Mr. Diller’s decision, “because I thought we were close to a solution.” But he was also elated.

“It’s a great decision,” Mr. Emery said. “It shows great respect for the estuary. It preserves the estuary as the legislature intended. I believe he came to believe he was being manipulated by the trust as much as the public was.”

But that was not the sentiment of the pier’s supporters, who included the local community board, Gov. Andrew M. Cuomo, Mayor Bill de Blasio and Senator Chuck Schumer.

Madelyn Wils, president of the Hudson River Park Trust, said in a statement that she was “deeply saddened” by Mr. Diller’s decision, “not simply because this would’ve been one of the world’s greatest piers, but because this was a project the community so resoundingly wanted, and that millions would one day enjoy.”

Senator Schumer had a sharper-edged response. “For such a small group of people to hold up a public and philanthropic project that would benefit so many is just awful,” Mr. Schumer said.

The opponents included the City Club of New York, which has few members and was almost dead just a few years ago. It was revived by a group of activists to fight zoning changes under the Bloomberg administration.

The pier, envisioned by the British designer Thomas Heatherwick, would have been the capstone of Hudson River Park, a four-mile-long strip of green along the Hudson that was created in 1998 as a city-state partnership. The Hudson River Park Trust was created to oversee its development and operation.

Mr. Diller also enlisted the help of the producer Scott Rudin and the director Mike Nichols.

Speaking at IAC headquarters, a sinuous white glass building designed by the architect Frank Gehry that sits on 18th Street, a short distance from both the elevated High Line and what would have been the walkway to Pier 55, Mr. Diller said the idea was born in November 2011. It came at a party for the High Line, to which he and Ms. von Furstenberg have been major donors.

Diana Taylor, the chairwoman of the Hudson River Park Trust, whispered to him, “I’ve got your next project.”

The 875-foot Pier 54, at the foot of 13th Street, was slowly falling into the Hudson. Mr. Diller said Ms. Taylor later showed him a proposed amoeba-shaped replacement “with a few trees” and an estimated cost of $35 million.

He embraced the notion, but brought in his own experts and commissioned a space age structure.

The project was formally announced in 2014 and won the support of the community board and other elected officials. The first lawsuit arrived seven months later.

In an email he sent to supporters of the project, Mr. Diller said that his sole purpose was to provide “a beautiful park on a dazzling pier for New Yorkers and visitors from around the world to stroll and wander, to be entertained, to be stimulated, to be playful, and to have the most wonderful time in a unique setting.”

In his email, Mr. Diller decried that a “tiny group of people had used the legal system to essentially drive us crazy and drive us out,” rather than defeat the plan on the merits.

The opposition — the City Club and two activists, Tom Fox and Rob Buchanan — have assailed the secrecy surrounding the project and its potential danger to a protected estuary. Mr. Durst, who leads a large Manhattan real estate family, had financed the lawsuits secretly, until a year ago, when Mr. Diller accused him of bankrolling the opposition.

Despite the recent settlement talks, Mr. Diller said members of his family asked him why he was bothering to continue with the project, when the family’s money might benefit other causes.

“That was a very hard question for me to answer,” Mr. Diller said.

Finally, he said, he grew discouraged after a settlement talk on Sept 5.

Mr. Diller said that after he called Ms. Wils on Tuesday to tell her of his decision, she asked him, “Would you consider building a smaller park?”

“I said: ‘Madelyn, honestly, we have to end this. Let a little time pass. I will be continually supportive of the Hudson River Park Trust.’”

In concluding the email to people who had labored over the project for as many as six years, Mr. Diller wrote, “I am so sorry.”

A version of this article appears in print on , on Page A1 of the New York edition with the headline: Lawsuits and High Costs Sink Billionaire’s Plan for Arts Pier. Order Reprints | Today’s Paper | Subscribe